Another example of how the emotionless boardroom practice of betting on derivatives of derivatives is no different than sitting at the Texas Hold'em table. Someone always walks away with the pot.Clearly, results like these were easily identifiable early in the game and simply nudged under the rug by the mortgage recipients, the lenders and, most importantly, the packagers of debt.However, God bless those under-employed and financially challenged people who managed to get into the game and, to date, to hold on to their homes.

How is the Fed valuating the mortgage backed securities that it is accepting, via JP Morgan, from Bear Stearns and what will be the consequences if these mortgage backed securities devaluate from the level at which the Fed valued them? Will the Fed then start to 'write down' its bad debts?

What is morally wrong is to bail Bear Sterns out now. They made their bets, it did not work out, sorry for those who allocated part (or all) their money with them. Taxpayers should not be footing the bill.
Now if JP Morgan wishes to acquire Bear Sterns and finds liquidity to do so, I'm all for it. But you can't be pro free markets if when the going gets tough you cry for Government help.
If, on the other hand, you favour Government intervention, then regulate Investment Banks and Hedge Funds heavily, to avoid too many risky bets.
This business of 'leave the markets alone' but 'help private banking when they fail' is unacceptable.

Things are getting worse in the US each day. More and more we are seeing that these are fast becoming serious and desperate times. People are beginning to feel real economic hardships that have only been known to people in third world countries. Gas price is now at $4 US per gallon in some parts of California and Hawaii. The dollar is taking a severe beating. Something needs to happen, not just for Bear Stearns, but for the entire US economy, fast.

I don't understand the financial system where most of the salvation depends on "investors confidence".Doesn't it seem to be VERY wrong to base your whole business model on this kind of irrational two word sentence?

More punch anyone?JP Morgan is probably trying to save itself as well. The razor thin margins of equity to debt are great on the inflationary rise of the financial markets (Greenspan bucks), a little scary now. The current Fed Chairman has little choice but to extend more credit, but how long can it continue and how much is enough? Mr. Greenspan, are you watching?

I just hope the prediction of Standard and Poor´s does not mean that the troubles will be over soon because will not remains any bank. It was like that fanatics with banners: Jesus is coming, the end is too. Wishful thinking will not helps now, but good analyses.